Thomas Jefferson Quotes

Note the candor with which the Congress provided the truth to Americans about the financial situation of the nation. Despite the national crises and emergency of the war, the Congress told the truth and did not treat the citizens as children from whom bad news must be withheld. At the time, each state and many individual banks had their own paper currency, these could be easily counterfeited and were done so by the British to collapse the American economy. Because of this early traumatic experience with paper money, the United States did not use it for another 70 years.

There were few if any consumer protection laws in those days and many wealthy aristocrats made their money by taking advantage of the poor. They were the landowners, bankers, financiers and often the industrialists. Shaw was a sarcastic social critic and this is a typical line he gave his upper class characters. Today, we have more controls on business and finance, and many wealthy business people have gotten that way by providing great value to the consumers and being honest. However, we still have large numbers of wealthy members of society who do make their money from the poor and middle class by unethical and often illegal means. In the aftermath of the Meltdown of 2008. hundreds of thousands of the homes of the working poor and middle class were foreclosed by the major banks forging the legal documentation for the foreclusures. Millions of consumer contracts are issued that even a PhD cannot understand the terms of without special legal and financial training. There is even a legal definition of a salesperson lying to make a sale which is so commonplace that our law excuses it and calls it "puffing". However, there has been over time, improvement over Shaw's era.

State Bond Holders prospects were not looking very good and some states would only discount their debts while others would not pay for the War Bonds at all. Most people had written off their State Bonds. The idea of the new National Government assuming this debt was profound for people who understood government, laws, and the like, but most patriotic farmers and frontiersmen sold their bonds to Speculators for a fraction of the value. Under the theory of bailing out the States, the rich Bankers, financiers and speculators of some states who had paid pennies on the dollar to buy the bonds would get the full face. would and make a huge windfall profit, The patriots who originally bought the bonds would have taken a big loss. The same argument with fairness and business support to be balanced has been ongoing in our democracy over and over whenever, the Federal Government has bailed out banks, countries, and corporations or guaranteed debts.

The silver enthusiasts believed that if the United States chose silver instead of gold to back the money supply, the U. S. economy would be greatly advantaged.

The result was regulation of the banks and the creation of the SEC to regulate the stock market, However, over the years, the regulations were not able to keep up with the sophisticated development of new forms of investments and financial instruments and the financial industry were able to speculate with other people’s money in ways that FDR and his reformers never imagined. Finally, even the regulation that did exist was weakened by the policies of the George W. Bush administration and the combination brought about the Great Recession of 2008 where the profits from excess speculation were privatized and the losses, socialized with the taxpayer and the American worker bearing the brunt while most of the speculators were bailed out and made more money than ever. The Obama administration tried to reform the situation, but was unable to put an end to the legal speculation with other people’s money or of having institutions that were “too big to fail.”

Political ideologues are particularly vulnerable as doctrine and party positions do not require understanding of the reasons for validity.

A “stock-jobber” at that time referred to a stock broker who bought and sold shares of companies and enterprises. Today it tends to refer to an unscrupulous stock broker or a short term speculator. In the 18th century, economists like Say questioned whether or not the stock jobbers performed any useful economic or other function. His and others concluded “no.” By the 21st century, many were asking the same question. So it is not a new issue as to the political debate over the utility of part of the financial industry. The short term speculators were for years considered gamblers until it was discovered that the more successful ones generally had inside information (often illegal) or used computer trading to take advantage of other shareholders whose computers were not as fast. However, the Great Depression and the Great Depression called into question whether or not the financial industry was itself a hazard to national economies if not the world economy. That questioning began in the 18th century.

The President, like most Americans, was outraged at the immoral, insensitive, and incompetent behavior of the financial industry in the Meltdown of 2008. However, the President learned how dependent the economy of the entire country was dependent on having solvent banks and how vulnerable the entire nation was to major failures of the investment and regular banks. So he was faced with very poor options. The government could have nationalized the banks, but that would produce an economic system which in the long run would not be very sound. Of the banks could be allowed to fail or risk failure in which case the entire population would suffer. Or he could lend money to the banks to stabilize and strengthen them while the bank executives were paying themselves huge bonuses even though they performed so poorly. He chose the latter and Warren was typical of criticism he received from many of his supporters. Even though the banks had broken the law and forged documents and committed perjury in tens of thousands of mortgage foreclosures, the President, as a practical matter, could not even prosecute the bank officials who were responsible because there were thousands of bank and other company officials who had committed the same crime. The guilty included almost every senior officer of the major banks, and jailing all these people was deemed impractical. So, to recover the economy, justice and fairness suffered.

For many general government regulations—labor, environment, non discrimination—the small business has a proportionately heavier burden of compliance. So large businesses have always been able to count on small business to lobby against regulation and for deregulation. However, when it comes to financial regulation such as the Dodd-Frank regulations essentially apply to large businesses. As a matter of fact, small businesses were on many ways the most frequent victims of the large banks and investment bank excesses in the Meltdown of 2008. Before most of the regulations could even take effect, the financial industry was already trying to get small business to lobby to roll back the protective regulations preventing future meltdowns and bank failure resulting from loose regulation and greedy irresponsible financial industry behavior. The President campaigned to convince the small business not to support the finance industry over their usual “knee jerk” reaction to any regulation.

Threadneedle and Lombard streets was the center of the London Financial District.

Webster was taking regular bribes from large corporations and even complained when his payments were late. So he might have had a pro-large business bias. At the time taking bribes even if there was a quid pro quo was not illegal or even “unethical” by then Congressional rules.

Stock brokers and investment banks who are supposed to provide professional investment advice generally tell their customers good news about a company, market sector, or the market in general, but rarely convey bad news even if they are aware of it. They will often protect their own accounts but not tell their customers what they know and what they honestly believe.

While Stockman and some others believe that the Meltdown of 2008 would have “run its course” if the government didn’t bail out financial institutions, the very conservative Republican Secretary of the Treasure Paulson and the Chairman of the Federal Reserve told President Bush, Congress, and incoming President Obama that if there was not a quick bailout, the economy of the nation would crash with a depression resulting as bad if not worse of the Hoover Depression of 1929. Bush and Obama and the majority of Congress agreed and took action to avoid that. There is no way of knowing whether they were right or Stockman was. However, the people with the responsibility of governing and safeguarding the nation clearly did not want to take a chance that the advocates of no action might be wrong.

The great scholars were as wrong as everyone else about the Great Depression

Major bankers were not only clueless in the Meltdown of 2008 and the Great Recession that followed, but they were equally hapless in the Market Crash of 1929 and the Great Depression thereafter.